FDIC: U.S. Banks FY Net Income Highest in Five Years

In its latest quarterly report on U.S. banks, the FDIC said lower provisions for loan losses, reflecting an improving trend in asset quality, lifted fourth-quarter net income of FDIC-insured U.S. banks. Fourth-quarter earnings totaled $26.3 billion, an increase of $4.9 billion (23.1%) compared with the same period of 2010.

Insured institutions set aside $19.5 billion in provisions for loan losses in the fourth quarter, a decline of $13.1 billion (40.1%) from fourth quarter 2010. The FDIC also noted that overall revenues continue to exhibit weakness for the third time in the last four quarters, with net operating revenue posting a year-over-year decline caused primarily by a $4.4 billion reduction in non-interest income.

The regulator said full-year 2011 net income rose to a five-year high. Net income totaled $119.5 billion, an increase of $34 billion (39.8%) from full-year 2010 earnings. This is the highest annual net income total since the industry earned $145.2 billion in 2006. The improvement in full-year net income was made possible by an $81.1 billion reduction in loan loss provisions.